1

Procurement Processes in UNOPS; An Overview

January 2014

What is procurement?

Procurement is the acquisition of:

• Goods• Works or services• Property, plant and/or equipment

Through• Purchase• Hire, lease, rental or exchange

2

Procurement principles

Best Value for Money: UNOPS defines ‘best value for money’ as the trade-off between price and performance that provides the greatest overall benefit under the specified selection criteria.

Fairness, Integrity and Transparency: Free from favouritism, impartial, honest and applies visibility and openness in all transactions. All information on procurement policies, procedures, opportunities and processes are clearly defined and made widely known and available, and rules and procedures are applied consistently to all potential bidders.

Effective Competition: UNOPS fosters competition in all procurement processes, as a means of ensuring fairness, integrity and transparency. Therefore, competition should be as open as possible.

Best Interest of UNOPS and its Clients: Maintaining the highest personal and institutional integrity, upholding the image and reputation of UNOPS, and promoting the public good as specified in the principles of the United Nations in every aspect of UNOPS’ procurement operations.

3

Formal

• The best offer is found by comparing several offers from different suppliers with UNOPS requirements, following a formal procurement process. This is the standard procurement method

Informal

• Awards of procurement contracts on the basis of exceptions to the use of formal methods of solicitation

• The award must be properly justified

• Shopping (< $2,500)• RFQ (<$50,000)

Amendments

• An extension or change to an existing contract

• Used when related goods/services/works are to be provided by the same supplier in furtherance of the original contract.

• Variation orders for works

Pre-selection

• Used when the funding source wants particular suppliers.

• UNOPS must also justify that the costs are reasonable

Emergency

• A simplified process which can be used in emergencies if pre-approved by the ECPO.

Post Facto and Retroactive

• Post-facto/Retroactive cases are not procurement processes; an administrative procedure to be followed for review and possible ratification of actions

Types of procurement

4

Types of competitions

Open

• Default/preferred method of competition for ≥ USD 50k

• Advertisement: UNOPS website & other media specified as mandatory in the project agreement and wherever suppliers can be reached

Limited

• A valid reason for not conducting an open competition must exist

• Can be international, regional or national

• Short-list must be pre-cleared by a Procurement Advisor and approved by relevant Procurement Authority

Exception

• UNOPS standard solicitation documents (RFP (for services with estimated cost of USD 50,000 or above) / ITB (for goods with estimated cost of USD 50,000 and above)) must be used

• Offer to be received in writing and evaluated

• Justify the reasonableness of the price

Pre-selection

• Funding source has pre-selected the suppliers according to its procurement rules & pursuant to the project agreement.

• Reasonableness of cost must still be justified

5

Solicitation method

RFQ – REQUEST FOR QUOTATION

ALLTYPES

2,500 USD to 50,000

USD

RFP – REQUEST FOR PROPOSAL

SERVICES

ITB – INVITATION TO BIDGOODS, WORKS

above 50,000 USD

SHOPPINGALLTYPES

below 2,500 USD

6

Solicitation method

ITB/RFP*: Used for Procurement valued ≥50K

RFQ: Used for Procurement valued <50K 10 calendar days advertisement

No Pre-clearance

RFP: 30 calendar days advertisement

ITB: 20 calendar days advertisement

*documents require pre-clearance by Procurement Advisor before approval and issuance

Solicitation documents

7

Overview of milestones

8

Definition of needs

Sourcing process

Solicitation process

Evaluation of offers

Review of award of contract

Contract signature

Delivery – completion of contract

Before you start a procurement process, be aware and aligned with…

9

Dealing with suppliers

CONTRACT ADMINISTRATIONLOGISTICS

Purchasing process

PLANNINGETHICSPOLICIES

SUSTAINABLE PROCUREMENT

EMERGENCYPROCUREMENT

DEFINE NEEDS

FIND SUPPLIERS

GET OFFERS

EVALUATE OFFERS

REVIEW PROCESS AND AWARD CONTRACT

METHOD AND COMPETITION

SOLICITATION DOCUMENTS

TENDER PERIODBID RECEIPT AND OPENING

PURCHASE ORDER /CONTRACT

ISSUE CONTRACT

Before purchasing

10

Milestone Definition of needs

Activity

Approx. timeline in weeks

-

-

2 12 weeks

Subject to involvement of technical experts and pre clearance and approval process of terms of reference/scope of works; design review if provided by partner/donor etc.

What can go wrong? Delay incurred by stakeholders involved; misunderstanding in what

the requirement really is

Formulation of technical specifications (for goods) or terms of reference (for services); considerations like ethics and sustainability shall flow into the process

11

Milestone Sourcing process

ActivityReview supplier base and determine level of dissemination ofbidding document, market research (local / international)

Approx. timeline in weeks

-

-

1 3 weeks

Subject to whether an Expression of Interest or pre qualification exercise will be conducted

What can go wrong? Failed or flawed tender results caused by identification of insufficient

numbers of qualified bidders; limitation to competition through inappropriate dissemination of tender; no understanding of localconditions, i.e., what is available, local practices and techniques,climate, soil etc.

12

Milestone Solicitation process

Activity

Approx. timeline in weeks

-2 3 weeks preparation plus:

4 weeks ITB6 weeks RFP

What can go wrong? -Delay through non pre clearance/approval of documentation by

Procurement Advisor/PA for quality etc. reasons

Issuance of solicitation document (ITB/RFP) – when the estimated value of your purchase is $50,000 or above

Sustainable Procurement Practice Group – Introduction to Procurement for Project Management Foundation Course 13

Milestone Evaluation of offers

ActivityEvaluation of formal compliance (capacity, etc.), technical and financial proposal, final recommendation

Approx. timeline in weeks

-1 3 weeksSubject to complexity, stakeholders involved

What can go wrong? Delay through clarifications with bidders; delay if technical evaluation

panel cannot reach agreement

14

Milestone Review of award of contract

Activity

Approx. timeline in weeks

5-1 2 weeksafter approval of award

3-- weeksSubject to value, complexity, reviews required as per procurement authority etc.

What can go wrong? , Failure of negotiations

withdrawal of selected bidderDelays caused by poor submission to the CPCs and resulting rejection

Contract negotiations,if applicable

Review, pre-clearance, clearance, approval, contracts committee/s etc.

15

Physical signing of the contract

Milestone Contract signature

Activity

Approx. timeline in weeks

What can go wrong? If no negations, contractor may not agree with UNOPS contract

format and/or general conditions of contract

Delays through official signing ceremony in the presence of donorsand community

16

In accordance with the delivery

Milestone Delivery – completion of contract

Activity/ Contract administration

management phaseMobilization time as of contractsignature, if applicable

Approx. timeline in weeks

What can go wrong? Delay in delivery

inability of contractor to performforce majeure

Delays in mobilizing resources like staff and equipment; delay in delivery of materials

schedule in the contract2 weeksafter contract signature

Approximate timelines of formal methods of solicitation until contract signature:

17

It is possible that the ITB / RFP process will be shorter than this but when planning we should provide for an appropriate time contingency. The above timelines to not take into consideration the actual delivery and completion times of a procurement activity.

CAP-NET Project and Pre-selection

18

•UNDP has pre-selected the Networks and their hosts according to its procurement rules & pursuant to the project agreement

•No need for UNOPS to undertake a complete procurement process

•Thresholds for review and award of contracts with pre-selected suppliers follow the thresholds and delegation of authority for award of contracts resulting from the use of formal methods of solicitation

•Reasonableness of cost must still be justified (entered in the Award Document)

CAP-NET Project and Pre-selection; Milestones and time-frame

19

Definition of NeedsDefinition of Needs: Networks together with CAP-NET Secretariat develops TOR for a specific activityTime-frameTime-frame: 2-3 weeks

Sourcing ProcessSourcing Process: N/ATime-frameTime-frame: N/A

Solicitation ProcessSolicitation Process: N/ATime-frameTime-frame: N/A

Evaluation of OffersEvaluation of Offers: CAP-NET Secretariat verifies the offers/proposals submitted by the NetworksTime-frameTime-frame: 2 weeks – depending on availability of staff

CAP-NET Project and Pre-selection; Milestones and time-frame

20

Review and Award of ContractReview and Award of Contract: CAP-NET Secretariat reviews the offers/proposals and draws up an Award Document. If the single value is below $50,000 the contract can be awarded by DOA* Level 1 (Themba).

If the single value is $50,000 or above or the cumulative value of contracts issued to the same network in the last 12 months is $50,000 or above it needs to be awarded by DOA Level 2 or above (Sr. Portfolio Manager at UNOPS in CPH). Time-frameTime-frame: 1-2 weeks

*Delegation of Authority

CAP-NET Project and Pre-selection; Milestones and time-frame

21

Contract SignatureContract Signature: Once the Award Document has been approved, the contract can be signedTime-frameTime-frame: 1-2 weeks

Delivery – Completion of ContractDelivery – Completion of Contract: Depends on nature of services carried outTime-frameTime-frame: N/A

CAP-NET Project and Pre-selection; Milestones and time-frame

22

Overall:Overall:

5 milestones

Minimum 6 weeks; maximum 8 weeks for the complete process

N.B. Often the time-frame is shorter than this but when planning we should provide for an appropriate time contingency.